The adjusted trial balance of Karise Repairs on December 31 follows. Number Account Title 101 124 128 167 168 201 210 301 302 403 612 623 637 640 650 690 Cash Office supplies Prepaid insurance KARISE REPATRS Adjusted Trial Balance December 31 Equipment. Accumulated depreciation-Equipment Accounts payable Wages payable C. Karise, Capital C. Karise, Withdrawals Services revenue Depreciation expense-Equipment Wages expense Insurance expense Rent expense Office supplies expense Utilities expense Totals Debit $ 24,000 1,700 2,400 53,000 Required: 1a. Prepare an income statement for the year. 1b. Prepare a statement of owner's equity for the year. 1c. Prepare a classified balance sheet at December 31. 2. Prepare the December 31 closing entries. Credit $ 5,300 15,000 1,400 37,000 107,700 19,500 5,300 42,000 600 10,500 3,800 3,600 $ 166,400 $ 166,400 Note: C. Karise, Capital account balance was $37,000 on December 31 of the prior year, and there were no owner investments during the year.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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